Kelly Services Narrows Q2 Revenue Decline to 5.8%, Lifts Full-Year Outlook
KELYA sits 90% above its 52-week low of $7.98.
Summary
Kelly Services' Q2 revenue decline narrowed sharply to 5.8%, with underlying revenue nearly flat. The company raised its full-year revenue outlook and affirmed margin growth, indicating improving demand and cost control.
Key Events · Earnings and Guidance · KELYA
-
Revenue Decline Narrows Sharply
Q2 revenue of $1.0 billion fell 5.8% year-over-year, a 500 bps improvement from Q1. Excluding discrete impacts from federal contractor and large customer losses, underlying revenue declined only 0.6%.
-
Profitability Beats Expectations
Adjusted EBITDA of $31.1 million and adjusted EBITDA margin of 3.0% improved 110 bps sequentially, driven by stable gross margins and SG&A discipline. Adjusted EPS of $0.37 exceeded guidance.
-
Full-Year Revenue Outlook Raised
Management now expects a low-to-mid single digit revenue decline for 2026, up from prior guidance, and affirmed modest adjusted EBITDA margin growth, citing accelerating underlying demand.
-
Q3 and Q4 Guidance Provided
Q3 guidance calls for underlying revenue growth of 1-2% and total revenue flat to -2%, with adjusted EBITDA margin in the low 2% range. Q4 is expected to see mid-to-upper single digit revenue growth and ~4% adjusted EBITDA margin.
Analysis · KELYA · Trade & Services
Second-quarter revenue came in at $1.0 billion, a 5.8% decline that marks a 500-basis-point sequential improvement. Stripping out discrete headwinds from federal contractor and large customer losses, the underlying contraction was just 0.6%. Adjusted EBITDA margin reached 3.0%, up 110 bps from the prior quarter, reflecting stable gross margins and disciplined cost management. Management raised its full-year revenue view to a low-to-mid single digit decline and reaffirmed modest adjusted EBITDA margin growth, signaling confidence in accelerating demand and operating efficiencies. The results and guidance exceeded expectations, suggesting the steepest part of the revenue contraction may be behind the company.
At the time of this filing, KELYA was trading at $15.15 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $551.5M. The 52-week trading range was $7.98 to $16.50. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.